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Forget Welcome To Wrexham, how about Escape from Swansea? Having started with a story about an absence of business in football, let us move to an example of some bad business in football: the 2016 takeover of Swansea City by a group of U.S. investors led by Steve Kaplan, who owns a minority stake in the NBA’s Memphis Grizzlies, and Jason Levien, the co-chairman and CEO of MLS side D.C. United.
Swansea were nearing the end of their fifth consecutive season in the Premier League when Kaplan and Levien bought a majority stake in the Welsh club at a valuation of £110million. Unfortunately, they were relegated to the Championship in 2018 and have haemorrhaged money in that division ever since.
But now — for Kaplan and Levien, at least — the bleeding has stopped, as they have sold their 65 per cent stake in Swansea to three investors they first introduced to the club last year: Andy Coleman, Brett Cravatt and Nigel Morris.
A shareholder at D.C. United, Coleman has been Swansea’s chairman since May 2023, while private-equity firm boss Cravatt and Welsh-American fintech entrepreneur Morris have been on the board for over a year, too. Cravatt’s business partner Jason Cohen is joining the gang, too.
But you know all this because The Athletic reported it two weeks ago. What we did not report, though, is the exact terms of the deal, saying only that the “precise value was contested”.
Well, now we know, as one of several rather disgruntled fellow investors sent us the email Kaplan and Levien wrote to shareholders in Swansea Football Holdings, the club’s parent company, explaining why they were selling up and the deal they had secured.
They reminded everyone how relegation had seen the club’s income fall by 80 per cent, with parachute payments and wage cuts only partially offsetting the pain. Their woes were compounded by the £30million they wasted on transfer fees and three-year contracts for strikers Andre Ayew and Wilfried Bony, in a failed attempt to avoid the drop, and the impact of the pandemic.
There were two promotion play-offs appearances, including a defeat by Brentford in the 2021 final, but once the parachute payments stopped that summer it has been mid-table mediocrity and “substantial operating losses”.
In 2023, after “years of exhaustive searches for alternatives”, they brought in three new investor groups led by Coleman, Cravatt and Morris, in return for an equity injection of over £40million, and now, 18 months further on, “it is this group of investors who are purchasing our interests and committing to make another significant investment in the club”.
Before outlining the terms of the deal in an attachment to the letter, “Jason and Steve” said they had “spent many sleepless nights over the years” worrying about what to do, acknowledged “there are things we would have done differently”, but assured everyone they had “forgone all management fees owed to us since relegation”, before asking them to “take some solace in that we never burdened you with a capital call”.
“This is an outstanding group of partners,” they added. “It pains us that this investment did not work out financially.”
So, just how bad was it?
There are three parts to the deal.
The first is a commitment by the newish investors to fund the club with a minimum of £20million in new equity. The second is a series of share transactions that hand over control of Swansea City to Cohen, Coleman, Cravatt and Morris for the grand total of $3,000, or £2,370.
And the last is an “inducement agreement” between the club, on one side, and Kaplan, Levien and their investors, on the other, with the latter receiving an additional £10million for every season Swansea spend in the Premier League between now and May 2035, capped at a maximum of £40m.
Does that give investors a fair chance of getting some more money back or is it just condemning them to another decade of dashed hopes
"In a free society, the State is the servant of the people—not the master."
1
Interesting article - NY Times on 16:54 - Nov 20 with 1179 views
Interesting article - NY Times on 13:54 - Nov 20 by Boundy
For those who can't access the article.
Forget Welcome To Wrexham, how about Escape from Swansea? Having started with a story about an absence of business in football, let us move to an example of some bad business in football: the 2016 takeover of Swansea City by a group of U.S. investors led by Steve Kaplan, who owns a minority stake in the NBA’s Memphis Grizzlies, and Jason Levien, the co-chairman and CEO of MLS side D.C. United.
Swansea were nearing the end of their fifth consecutive season in the Premier League when Kaplan and Levien bought a majority stake in the Welsh club at a valuation of £110million. Unfortunately, they were relegated to the Championship in 2018 and have haemorrhaged money in that division ever since.
But now — for Kaplan and Levien, at least — the bleeding has stopped, as they have sold their 65 per cent stake in Swansea to three investors they first introduced to the club last year: Andy Coleman, Brett Cravatt and Nigel Morris.
A shareholder at D.C. United, Coleman has been Swansea’s chairman since May 2023, while private-equity firm boss Cravatt and Welsh-American fintech entrepreneur Morris have been on the board for over a year, too. Cravatt’s business partner Jason Cohen is joining the gang, too.
But you know all this because The Athletic reported it two weeks ago. What we did not report, though, is the exact terms of the deal, saying only that the “precise value was contested”.
Well, now we know, as one of several rather disgruntled fellow investors sent us the email Kaplan and Levien wrote to shareholders in Swansea Football Holdings, the club’s parent company, explaining why they were selling up and the deal they had secured.
They reminded everyone how relegation had seen the club’s income fall by 80 per cent, with parachute payments and wage cuts only partially offsetting the pain. Their woes were compounded by the £30million they wasted on transfer fees and three-year contracts for strikers Andre Ayew and Wilfried Bony, in a failed attempt to avoid the drop, and the impact of the pandemic.
There were two promotion play-offs appearances, including a defeat by Brentford in the 2021 final, but once the parachute payments stopped that summer it has been mid-table mediocrity and “substantial operating losses”.
In 2023, after “years of exhaustive searches for alternatives”, they brought in three new investor groups led by Coleman, Cravatt and Morris, in return for an equity injection of over £40million, and now, 18 months further on, “it is this group of investors who are purchasing our interests and committing to make another significant investment in the club”.
Before outlining the terms of the deal in an attachment to the letter, “Jason and Steve” said they had “spent many sleepless nights over the years” worrying about what to do, acknowledged “there are things we would have done differently”, but assured everyone they had “forgone all management fees owed to us since relegation”, before asking them to “take some solace in that we never burdened you with a capital call”.
“This is an outstanding group of partners,” they added. “It pains us that this investment did not work out financially.”
So, just how bad was it?
There are three parts to the deal.
The first is a commitment by the newish investors to fund the club with a minimum of £20million in new equity. The second is a series of share transactions that hand over control of Swansea City to Cohen, Coleman, Cravatt and Morris for the grand total of $3,000, or £2,370.
And the last is an “inducement agreement” between the club, on one side, and Kaplan, Levien and their investors, on the other, with the latter receiving an additional £10million for every season Swansea spend in the Premier League between now and May 2035, capped at a maximum of £40m.
Does that give investors a fair chance of getting some more money back or is it just condemning them to another decade of dashed hopes
Many thanks. They appear to have sold the club from pennies as I understand it but would want up to £40m if the club returned to the PL.
The group s does sound like a hedge fund structure with minor investors paying Levien and Kaplan an annual fee for their " expertise". Their wisdom was seen by them as finding Huw Jenkins who was riding high in 2014- w. 2015. He has done miracles with no money sho should theoretically do much better with cash.
Weak managers allowed Jenkins to waste money which he had never done before apart from low cost flops like Tabanou Eder and Ngog. Bony was adept at passing medicals then needed 6 months to recover from them it seems.
People wondered how K&L made money. They were paid annual fees by the general investors like the fellow that had a whinge o youtube.
The investment turned sour and by the looks of it K&L waived their fees after the first year or two.
It could be that investors are twinned in someway with DC Utd which will be a huge money spinner for them inf the Saudis want a soccer team in downtown Washington for a bit of bonding withe the West.
Wise sage since Toshack era
0
Interesting article - NY Times on 17:19 - Nov 20 with 1150 views
Interesting article - NY Times on 19:22 - Nov 20 by max936
Eye watering figure that, strewth.
Write it off against tax. But it just shows there was never a "feeling" for the club and it was just an investment vehicle. That is where they went wrong from day one. To be successful with Swansea City you have to "get" the club, it's history and the people.
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Interesting article - NY Times on 19:51 - Nov 20 with 944 views
A tiny tiny tiny part of me wishes we stay out of the Prem for the next ten years just to really F**k those Yanks up but I prob aint got that long left
0
Interesting article - NY Times on 20:04 - Nov 20 with 914 views
Interesting article - NY Times on 19:39 - Nov 20 by Whiterockin
Write it off against tax. But it just shows there was never a "feeling" for the club and it was just an investment vehicle. That is where they went wrong from day one. To be successful with Swansea City you have to "get" the club, it's history and the people.
Was always about money Whitey, Jack to a King did its job.
Lets remind us of what JL promised in 2016. He set a high bar and should not have made the promises if they could not deliver. There have been very few highs over the last 8 years and maybe he will apologise to the fans as he leaves?
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Interesting article - NY Times on 21:16 - Nov 20 with 818 views
Interesting article - NY Times on 20:31 - Nov 20 by QJumpingJack
Lets remind us of what JL promised in 2016. He set a high bar and should not have made the promises if they could not deliver. There have been very few highs over the last 8 years and maybe he will apologise to the fans as he leaves?
Apologise, that word isn't in his vocabulary he thought it would be easy and that the dollars would flood in, him and his equally despicable partner didn't have a clue, as I've said along with others I might add, Jack to a King was a master stroke by the sellouts.
Interesting article - NY Times on 21:16 - Nov 20 by max936
Apologise, that word isn't in his vocabulary he thought it would be easy and that the dollars would flood in, him and his equally despicable partner didn't have a clue, as I've said along with others I might add, Jack to a King was a master stroke by the sellouts.
Best promo film ever.
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Interesting article - NY Times on 21:32 - Nov 20 with 761 views
Interesting article - NY Times on 16:54 - Nov 20 by ReslovenSwan1
Many thanks. They appear to have sold the club from pennies as I understand it but would want up to £40m if the club returned to the PL.
The group s does sound like a hedge fund structure with minor investors paying Levien and Kaplan an annual fee for their " expertise". Their wisdom was seen by them as finding Huw Jenkins who was riding high in 2014- w. 2015. He has done miracles with no money sho should theoretically do much better with cash.
Weak managers allowed Jenkins to waste money which he had never done before apart from low cost flops like Tabanou Eder and Ngog. Bony was adept at passing medicals then needed 6 months to recover from them it seems.
People wondered how K&L made money. They were paid annual fees by the general investors like the fellow that had a whinge o youtube.
The investment turned sour and by the looks of it K&L waived their fees after the first year or two.
It could be that investors are twinned in someway with DC Utd which will be a huge money spinner for them inf the Saudis want a soccer team in downtown Washington for a bit of bonding withe the West.
“Weak managers allowed Jenkins to waste money ……”
What on earth is this drivel? The managers were simply employees of the Club, Jenkins was the Chairman / Head Honcho. The managers would not have a great deal of say in anything and would do what they were told.
If the managers had the degree of power you’re talking about, maybe they could have “not allowed” Jenkins to sack them.
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Interesting article - NY Times on 21:53 - Nov 20 with 700 views
Like pretty much everyone on here I’m glad to see the back of them.
A long time ago I held the club and its officials in very high esteem, what happened after the Hull game through to the Napoli games was astounding. After that, things started to go Pete Tong and the way the takeover was conducted and the manner in which the Trust were treated left me feeling quite disillusioned - I’ve not been to the Liberty as often as I could and should have.
I appreciate there are still going to be connections with the old regime, but I very much hope this is going to be a case of a new broom sweeping clean and wish the new owners the best of luck. Hopefully the fans can get behind Coleman and the new ownership team.
4
Interesting article - NY Times on 22:47 - Nov 20 with 631 views
Interesting article - NY Times on 21:39 - Nov 20 by majorraglan
“Weak managers allowed Jenkins to waste money ……”
What on earth is this drivel? The managers were simply employees of the Club, Jenkins was the Chairman / Head Honcho. The managers would not have a great deal of say in anything and would do what they were told.
If the managers had the degree of power you’re talking about, maybe they could have “not allowed” Jenkins to sack them.
Indeed. Weak owners allowed Jenkins to waste money.
The Bradley appointment was a monumental catastrophe more for what it did off the pitch than on it. That momentary flexing of their muscles went so badly it frightened them off from interfering for several years and gave Jenkins free reign to piss away capital that was no longer his.
It's probably not an exaggeration to suggest that played a large part in where we are now. Not a complete part, maybe not even the primary one, but it was a significant "sliding doors" moment.
I hesitate to say it's the major reason because as everyone knows of course, we'd started making horrendously bad decisions as a club years before Kaplan and Co arrived with the promotion of Monk from chief snitch to manager.
[Post edited 21 Nov 7:23]
Pain or damage don't end the world. Or despair, or f*cking beatings. The world ends when you're dead. Until then, you got more punishment in store. Stand it like a man... and give some back.
1
Interesting article - NY Times on 10:22 - Nov 21 with 348 views
Interesting article - NY Times on 19:51 - Nov 20 by blackpooljack
A tiny tiny tiny part of me wishes we stay out of the Prem for the next ten years just to really F**k those Yanks up but I prob aint got that long left
This type of thinking is what I have been highlighting and it is toxic and not good for the club. Football is for deep pockets and risk taking. I admire Levien and Kaplan they put their money on the table.
There are very few Welsh people like this due to our heritage of being employees not employers.
Back Coleman before you sign off. He is upfront confident and up for the scrap. The fans owners can bring their knitting to games.
Wise sage since Toshack era
0
Interesting article - NY Times on 10:28 - Nov 21 with 330 views
Interesting article - NY Times on 10:22 - Nov 21 by ReslovenSwan1
This type of thinking is what I have been highlighting and it is toxic and not good for the club. Football is for deep pockets and risk taking. I admire Levien and Kaplan they put their money on the table.
There are very few Welsh people like this due to our heritage of being employees not employers.
Back Coleman before you sign off. He is upfront confident and up for the scrap. The fans owners can bring their knitting to games.
Welsh people got us to the Premier League, money orientated yank owners got us relegated.
Fact.
1
Interesting article - NY Times on 10:51 - Nov 21 with 298 views
Interesting article - NY Times on 10:22 - Nov 21 by ReslovenSwan1
This type of thinking is what I have been highlighting and it is toxic and not good for the club. Football is for deep pockets and risk taking. I admire Levien and Kaplan they put their money on the table.
There are very few Welsh people like this due to our heritage of being employees not employers.
Back Coleman before you sign off. He is upfront confident and up for the scrap. The fans owners can bring their knitting to games.
Pointless putting money on the table if you are not going to work hard after it's been laid down and anything less is a gamble.
I think the article just highlights their failure coupled with a lack of incompetence.
How many times since we got relegated we're they actually over here in the country? I will give Coleman is dues that he is here and on the ground, he can see the situation first hand which probably helped the situation in moving Kaplan and Levien on.
Hopefully the non sign off on players like Riley and Ogbene(twice) coupled with a few others(Longman another) will come to light once they have moved on. It's been a disaster and the 2 clowns didn't even try from day one.
Interesting article - NY Times on 10:22 - Nov 21 by ReslovenSwan1
This type of thinking is what I have been highlighting and it is toxic and not good for the club. Football is for deep pockets and risk taking. I admire Levien and Kaplan they put their money on the table.
There are very few Welsh people like this due to our heritage of being employees not employers.
Back Coleman before you sign off. He is upfront confident and up for the scrap. The fans owners can bring their knitting to games.
He emphasised it was a ‘tiny tiny part’ of his thinking. I’m sure all of us feel the same.
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